The notice, dated August 27, was issued by the Assistant Commissioner of State Tax, Mumbai, for the financial year 2020-21, the private-sector lender said in an exchange filing on Friday.
The proposed demand relates to input tax credit availed under the separate GST registration obtained by RBL Bank for its digital banking business vertical.
RBL Bank plans to contest notice
The bank said it will respond to the show-cause notice within the prescribed timeline and believes it has adequate grounds to contest the demand on its merits.
Its confidence partly stems from earlier rulings involving the same issue. RBL Bank said it had received favourable orders from GST authorities for FY2018-19 and FY2019-20 on an “identical issue.”
The bank therefore doesn’t currently expect the proceedings to have a material adverse impact on its operations or financial position.
A show-cause notice is a preliminary step in tax proceedings, giving the company an opportunity to respond to the allegations before authorities pass a final order.RBL Bank shares were trading 1.25% lower at ₹380.60 on the NSE at 3:11 pm on Friday.
